With interest rates rising does it still make sense to own bonds? Yes. This episode explores the role of bonds including why they are more effective at hedging stock losses than protective put options. Topics covered include: David's business and investment philosophy How bond funds have performed in 2021 Three disparate views on the direction of interest rates from Capital Economics, Ray Dalio, and Hoisington Investment Management Company How to invest in China … [Read more...]
331 Plus: Member Profile, Tail Risk Protection, Rental Real Estate as Bond Substitute, and YYY ETF
In Plus Episode 331, we profile a member in Bosnia who is deciding on a new asset allocation after selling a business. We consider whether investors in their thirties should seek tail risk protection against declining stock markets. We evaluate how rental real estate can be used as a bond substitute. Finally, we analyze the Amplify High Income Fund ETF (YYY) that invests in closed-end funds. We also discuss CEFL and CEFD that follow a similar strategy. … [Read more...]
324 Plus: Currencies, Bond Convexity, and Support Levels
In Plus episode 324, we discuss a new investor's question on how the currency can impact an investment's return. We explore bond duration and convexity and why the duration for bonds increases as interest rates fall. Finally, we consider support and resistance levels for stocks and whether they have any merit. … [Read more...]
308 Plus: August 2020 Investment Conditions and Model Portfolio Changes
In this Plus episode, we review investment conditions as of early August 2020. We discuss the recent changes to the adaptive model portfolios to add core fixed income. Finally, we review recent and anticipated changes to David's portfolio. … [Read more...]
306 Plus: Member Profile, Bond Investing, and Emerging Technology
In this Plus episode, we profile a member who is transitioning his portfolio for retirement. We discuss fixed income options, fixed annuities and other challenges with a low interest rate environment. We also look at the viability of investing in individual emerging technology stocks, particularly companies focused on computer vision. … [Read more...]
302 Plus: Laddered Bonds, Portfolio Profile and Buying Your Employer’s Stock
In Plus episode 302, we review recent trades in David's portfolio and discuss ways to construct a laddered bond portfolio. We analyze a portfolio managed by a financial advisor for a 71-year old woman. Finally, we discuss whether individuals should purchase their employer's stock as part of a promotion even if it leads to a highly concentrated position. … [Read more...]
279 Plus: December 2019 Portfolio Review, A Member Profile and Why Bonds
In Plus episode 279 for the week of December 6, 2019, we review changes to David's portfolio and discuss why there haven't been changes to the model portfolios in the past year. We review a member's portfolio and discuss his 25% allocation to an actively managed separate account. We discuss the criteria the member uses to evaluate the manager. Finally, we review why investors would want to own bonds. … [Read more...]
255: With Interest Rates Falling, Why Do You Own Bonds?
How an asset class such as bonds can play different roles in your portfolio depending on your investment philosophy. In this episode you’ll learn: What are bonds and how can they be used in investment portfolios.What is interest rate anticipation.Why individuals have an advantage over institutions because they don't have to worry about outperforming a benchmark when it comes to bonds.Why U.S. interest rates could rise and fall from current levels.Why China is unlikely to sell all … [Read more...]
225: How To Invest In Bonds and Other Fixed Income Securities
How to evaluate interest rate risk, credit risk and other factors when investing in bonds. Photo by Wes Hicks In this episode you’ll learn: What determines interest rates.What determines the performance of fixed income investments.How to estimate the return of fixed income holdings.The tradeoff between owning individual bonds or bond funds/ETFs Show Notes Eaton Vance Bank Loan Chart Book Annual Default Study: Corporate Default and Recovery Rates, 1920 - 2017 - … [Read more...]
224 Plus: October 2018 Portfolio Review and Longer-Term Bonds
This week October 5, 2018, we review the model portfolios and discuss the recent change in the models and David's portfolio in terms of swapping DoubleLine Bond Funds. We also look at what conditions would justify investing in longer-term bonds. … [Read more...]
